Finnish government looks to enlist councils for wind power investment

FINLAND: In a renewed drive to generate more extensive support for its sagging renewable energy plans, Finland's coalition government plans to hold discussions with the heads of the country's 348 municipalities to identify which local councils are financially and geographically best-equipped to invest in wind power generation.

Finnish prime minister Matti Vanhanen is seeking greater commitment to wind energy from the country's city councils (pic Baltic Development Forum)
Finnish prime minister Matti Vanhanen is seeking greater commitment to wind energy from the country's city councils (pic Baltic Development Forum)

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The government wants councils to row in behind its ambitious plans to achieve 2 GW of generation from wind-based power by 2020.
The discussions will focus on securing a higher level of cooperation from Finland's largest cities, including Helsinki, Turku, Pori, Oulu, Vaasa and Tampere.
"This is an opportunity for city authorities, and especially cities like Helsinki, to reduce dependence on coal-fired electricity while turning to renewable production," said Prime Minister Matti Vanhanen. I would like to see Helsinki invest part of its annual profits in wind and other renewable energy.
Helsingin Energia (HE), the biggest energy group in Southern Finland, reported profits of EUR 300 million in 2008. Under the government's proposal, HE would invest between 20 and 50 per cent of its surplus into wind power generating projects.
"Helsinki needs to increase its share of renewable energy sources to 20 per cent by 2020," says Vanhanen. Otherwise Finland will not achieve the national goal of sourcing 38 per cent of our energy from renewable sources by that time. Wind can replace some older coal and gas-fired units that currently supply electricity to the city of Helsinki.
HE's board is open to investing more in wind-based power generation, says company CEO Seppo Ruohonen. Helsinki currently obtains over 50 percent of its energy needs from coal and natural gas-fired plants. Only 10 per cent is sourced from all types of renewable energy. Less than 1 percent of its total energy is derived from wind power.
"We are already investing in renewable energy," says Ruohonen. Our target is to raise use of renewable energy sources so that our energy production will be carbon dioxide neutral by 2050. Our main problem is space and finding suitable sites for wind farms.
The greatest element of uncertainty, as regards overall profitability, for cities concerns government incentives to build new wind farms, says Ruohonen. "Planning and permission processes are slow and varied. The confidence of investors requires a clear and sustained subsidy policy. The best form of subsidy is direct investment support. Wind power investments are expensive, and payback times are long. Subsidies that are paid in small instalments can be cut by political decisions after investments are made. This is why clarity is so important.
Helsingin Energia is involved in a joint venture with Etelä Pohjanmaan Voima (EPV) that proposes to build two offshore wind farms based in the southern Gulf of Finland and the western Gulf of Bothnia. The offshore wind farms would have installed capacity of 500 to 1,000 MW.
However, few other Finnish cities can boast Helsinki's lofty level of profitability. To deal with the economic downturn and reduced funding from local taxes and the Exchequer, cities such as Turku and Tampere have had to impose widespread cuts to their existing renewable energy projects and programmes.
"We would like to increase use of renewable power and invest in more wind power projects," says Jukka Mikkola, chairman of Turku City Council. "But we are shackled by a lack of resources. The truth is that only a handful of Finnish cities have sufficient funds right now to invest in wind power schemes."

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